CORPORANCE: A new ECGS partner in Spain

Madrid, 26 September 2017. - CORPORANCE ASESORES DE VOTO, Spain’s first proxy advisory, hosted its first conference today in Madrid, to a sizeable audience which included national and international experts. . CORPORANCE is the member for Spain and Portugal of the global partnership ECGS (Expert Corporate Governance Service), a network of leading independent European proxy and corporate governance advisors. ECGS and its partners have been advising European institutional investors for over 20 years.

CORPORANCE founder, Juan Prieto, kicked off the conference by introducing the new advisory and the role it is slated to play in Spain. Two panel discussions were then held. The first dealt with inter alia potential conflicts of interest at proxy advisors, independence and remuneration. During the second panel, the new EU Shareholders´ Rights Directive ("SRD II") was addressed and panellists discussed how it will usher in a new set of requirements for investors, issuers, intermediaries and proxy advisors.

First Panel: corporate governance in Europe

This first panel was composed of the former president of the Spanish Securities regulator CNMV and independent arbitrator Manuel Conthe, who was joined by the deputy managing director of the German shareholders association DSW, Jella Benner-Heinacher (Germany), the CEO of Proxinvest and managing partner of ECGS Loïc Dessaint (France), and the founder of Frontis Governance and ECGS Senior Analyst for Southern Europe, Sergio Carbonara (Italy).

During the debate, the growing importance in Europe and the United States of the remuneration of executives and directors was highlighted and recent experiences in this area were discussed. Reference to the differences between some European countries in terms of remuneration was also made and the appropriateness of doing a case-by-case analysis of this matter was stressed. Panellists also pointed out that the remuneration of independent directors should be low, not to hinder the independence of such directors.

The importance of services provided by proxy advisors to institutional investors was emphasized: since investors lack sufficient resources and time to analyse corporate governance metrics at companies in which they are invested, it is imperative that they exercise their voting right responsibly. Juan Prieto, who moderated the panel, said that Spain has evolved positively in terms of corporate governance by issuers in recent times. He highlighted the important role of proxy advisors in promoting engagement and improving communication between companies and their shareholders.

Second Panel: SRD II

The second panel included the president of INVERCO, Ángel Martínez-Aldama, the chief compliance officer of Goldman Sachs Spain, Pilar López-Aranguren, the lawyer and member of the Board at InmoSur, Gregorio Arranz Pumar, and the Director of Financial Communication at ATREVIA, Susana Graupera. Ramón Hernández, partner and legal director of CORPORANCE, who acted as moderator of this second panel, stressed that the new directive represents a significant improvement for corporate governance and harmonizes the applicable legal regime in relation to the exercise of voting rights, institutional investors, financial intermediaries and proxy advisors. He briefly touched on the role of proxy advisors, their strengths and areas where they can improve, noting that CORPORANCE will follow international best practices on transparency by publishing its policies and activities.

The Spanish panellists discussed the importance for investors to exercise their voting rights in order to pormote long-term sustainable growth and performance. The shareholders´ identification regime was discussed, both from the issuers’ and the intermediaries´ perspective. Questions on data protection legislation, the chain of intermediaries outside of the EU, the impact the directive will have on business-to-business communication and transparency, and the effect that this will have on corporate reputation were also raised.

In thanking the 120+ attendees and panellists for their participation, Juan Prieto extolled the virtues of CORPORANCE’s founding credo: transparency, accountability, and best practices.

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